Poking through the Clouds

Enter the Rainbow, Part Two: The Michigan Supreme Court Protects LGBTQ Rights

The end of July 2022 found Michigan’s employment landscape clouded over with all kinds of legal and financial issues relating to the ruling by the Court of Claims that the state legislature acted unconstitutionally when it adopted but then amended two 2018 ballot initiatives providing earned sick leave for most Michigan workers and increasing the minimum wage for all employees. (See Back to the Future: Michigan Court Revives Paid Sick Leave Requirements and Minimum Wage Hike). As Michigan employers scrambled to figure out the financial implications of this ruling they may have missed the rainbow that poked through the clouds on July 28, 2022, when the Michigan Supreme Court provided additional legal protections to the LGBTQ community ruling that sexual orientation and gender identity are subject to protection under Michigan’s Elliott-Larsen Civil Rights Act (“ELCRA”) settling an issue that had lingered despite federal law protections for most employees that had existed since early 2020.

The First Rainbow: The U.S. Supreme Court Adds Rainbow Colors to Most Employment Relationships

In June 2020 we reported that the U.S. Supreme Court, in its Bostock v Clayton County Georgia put a spotlight on the rainbow that symbolizes the LGBTQ community by ruling that Title VII of the Civil Rights Act covers sexual orientation and gender identity. (See Enter the Rainbow: Supreme Court Rules that Title VII Protects LGBTQ Workers). The decision was an important step forward in terms of job protection for the LGBTQ community under Federal Law, but we noted that it left a gap in the protection of Michigan members of the community because it did not apply to small employers not covered by Federal Law and the Michigan Courts had ruled that Michigan’s Elliott-Larsen Civil Rights Act does not specifically provide protection based on sexual orientation. While the Michigan Department of Civil Rights had announced in 2018 that it was going to apply ELCRA as if it did provide such protections, legal challenges to that interpretation soon followed from a wedding venue that denied a request to host a same-sex wedding and from an electrolysis business that denied its services to a transgender woman. This left a cloud of doubt regarding the protection of the Michigan LGBTQ community not only with respect to the public accommodation issues involved in the litigated cases but for those working for small employers not covered by Title VII. Legislative initiatives to amend the ELCRA stalled leaving the issue in limbo while the legal challenges awaited resolution.

The Second Rainbow: The Michigan Supreme Court Colors the Rest of the Picture

On July 28, 2022, the Michigan Supreme Court in Rouch World, LLC v Department of Civil Rights removed the doubt that had lingered under Michigan law, ruling that under the unambiguous language of the statute, discrimination on the basis of gender identity or sexual orientation necessarily involves discrimination because of sex in violation of the statute. While the specific issue before the Michigan Supreme Court related to sexual orientation and gender identity discrimination in places of public accommodation under section 302 of the Act, the rationale used by the Court leaves no doubt that such discrimination is also illegal in the employment setting under the virtually identical language of Section 202 of the Act which relates to employment practices.  Indeed, the Court’s analysis of the language of the statute was essentially identical to that used by the U.S. Supreme Court in Bostock v Clayton County which specifically found that such discrimination is illegal in the employment setting.

The Current Landscape for Michigan Employers

As we reported on August 2, 2022, the ruling that Michigan employers would face the significant sick leave and minimum wage requirements as set forth in the original ballot initiatives has been put on hold through February 19, 2023. (See Update: Court Stays Enforcement of Revived Earned Sick Time Act and Minimum Wage Hike). With the dark cloud of expense accompanying the initiatives at least temporarily blowing away, Michigan employers can now see that the landscape includes the full array of rainbow colors protecting against discrimination based on sex including gender identity and sexual orientation. As a result, care must be taken that all decisions relating to hiring, firing, discipline, promotion, and other employment practices are free of any such discrimination.

Michigan employers that have any questions regarding the impact of the Rouch World ruling or would like a review of their policies and handbooks to assure compliance with the newly recognized non-discrimination obligations can contact a member of the Rhoades McKee Human Resource and Employment Law Team for assistance.